Branching, secondary growth, and photosynthesis are vital developmental processes of woody plants that determine plant architecture and timber yield. However, the mechanisms underlying these processes are unknown. Here, we report that the Populus transcription factor High Cambium Activity 2 (PdeHCA2) plays a role in the transition from primary to secondary growth, vascular development, and branching. In Populus, PdeHCA2 is expressed in undifferentiated provascular cells during primary growth, in phloem cells during secondary growth, and in leaf veins, which is different from the expression pattern of its homolog in Arabidopsis. Overexpression of PdeHCA2 has pleiotropic effects on shoot and leaf development; overexpression lines showed delayed growth of shoots and leaves, reduced photosynthesis, and abnormal shoot branching. In addition, auxin-, cytokinin-, and photosynthesis-related genes were differentially regulated in these lines. Electrophoretic mobility shift assays and transcriptome analysis indicated that PdeHCA2 directly up-regulates the expression of BRANCHED1 and the MADS-box gene PdeAGL9, which regulate plant architecture, by binding to cis-elements in the promoters of these genes. Taken together, our findings suggest that HCA2 regulates several processes in woody plants including vascular development, photosynthesis, and branching by affecting the proliferation and differentiation of parenchyma cells.